Service members living off base will notice their basic allowance for housing will increase about 7 percent next month to keep pace with rental costs.
A total of 1.2 million service members will draw the allowance in 2008, an increase of 250,000 over 2007, said Susan Brumbaugh, director of the program for the Department of Defense.
Most of the jump, she said, probably stems from reservists being called to active duty to support contingency operations, including wars in Iraq and Afghanistan. But part of the growth is the effect of housing privatization partnerships.
As the inventory of military housing falls, private contractors are building or refurbishing units, with government help, to rent exclusively to military members. The result is a dwindling number of service members living in base housing and a rising number who qualify for the basic allowance but who see their allowance transferred monthly as rent to live in contractor-owned housing.
The allowance rates for 2008 are available online at: http://perdiem.hqda.pentagon.mil/perdiem/bah.html. They vary by pay grade and assignment area.
Also, service members with dependents draw higher allowances than those without. The disparity between single and married service members has been criticized as indefensible in a modern compensation system, most recently by the Defense Advisory Committee on Military Compensation in 2006. The panel of outside pay experts said the allowance for those without dependents should be raised to match the married rate. But the estimated cost was $550 million a year.
The 10th Quadrennial Review of Military Compensation, an internal Pentagon study group, will make a host of pay recommendations next year. One idea being studied is to raise the allowance for single members gradually until the difference disappears in four or five years.
The review officials have recommended, in recent months, that a floor be set when calculating 2008 housing allowance rates so members without dependents receive no less than 75 percent of the rate for those with dependents. Defense officials accepted the recommendation. As a result, members without dependents will be paid an additional $34 million during 2008.
Is the 75-percent floor a first step toward eliminating the allowance disparity, to be followed by an 80-percent rate floor in 2009 and so on? One official suggested it could be. But Virginia Penrod, director of military compensation in the Office of the Secretary of Defense, said it’s too early to know whether that scenario will play out. The quadrennial review, she said, won’t make its recommendation until early 2008, and Defense officials haven’t decided yet whether to support a phase-out of the allowance disparity.
Adoption of a 75-percent limit in setting 2008 allowance rates “definitely is good news for single members,” Penrod said. But it should be viewed simply as a move “to ensure that our single members have comfortable housing compared with civilian counterparts.”
Tricare enrollment fees
The final report of the Pentagon-appointed Task Force on the Future of Military Health will call for a new “modest” enrollment fee for 1.9 million elderly military beneficiaries who use their Tricare for Life medical benefits.
The task force, as expected, also will call for higher Tricare fees, deductibles and co-payments for three million younger retirees and their families. In an interim report last May, the task force said Congress should restore the relative cost share that retirees under age 65 paid when Tricare began more in the mid-1990s. Tricare fees, deductibles and co-pays have not changed since then. Defense officials have tried twice to raise fees on younger retirees, but Congress blocked the plan this year and in 2006.
The idea of a new enrollment fee for Tricare for Life beneficiaries was not in the task force’s May report. It is expected to anger older generations of retirees who have argued for decades they were promised free health care for life.
Gail Wilensky, an economist who co-chairs the task force, outlined the 12 major recommendations during a meeting Tuesday of the Defense Health Board in Crystal City, Va.
Part of one recommendation is a small enrollment fee for Tricare for Life, she said. It is not intended to cut program costs but “to foster personal accountability and to be consistent with the task force philosophy that military retiree health care should be very generous but not free.”
Tricare for Life is second payer insurance to Medicare. To be eligible, beneficiaries pay Medicare Part B premiums just like civilians. For 2008, the standard Part B premium will rise a few dollars to $96.40 a month.
Given that other Medigap plans are “quite expensive” and that Tricare for Life is an “important and extensive” benefit, Wilensky said, task force members felt it was time to establish a small enrollment fee.
Gregory Poland, president of the Defense Health Board, praised the task force’s final report. He noted from its pages that military health costs doubled from $19 billion in fiscal 2001 to $40 billion in 2007. If changes aren’t made, he said, medical spending will hit $64 billion by 2015 and consume 12 percent of the defense budget versus 4.5 percent back in 1990.
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